The forest management practices in Finland are closely related to the industrial history in the country. The selection cutting method used previously has now been gradually disappearing, and differences in the quality of forest management can still be observed between different owner groups. The national forest inventories indicate that farm woodlots show the poorest silvicultural state among the ownership categories. This study analyses social and economic causes responsible for variation in the silvicultural state of farm woodlots managed jointly with a cultivated land holding. The study is based on the data of third national forest inventory in Finland, and a factor analysis was calculated using the data.

Although the model developed explains more than a half of the total variance of the level of silviculture, only less than third of this is clearly explained by economic and social factors. The remaining two thirds are explained by the ’nature factor’, which includes both economic and site factors. This affects the effect of different kinds of forest policy measures. Of the variables in the model, the strongest influence in the level of silviculture have income, size of woodlot, size of land area under cultivation and distribution of forest types. The differences in the level of silviculture between different woodlots and different districts, may be explained by the theory of cumulative process. Regional differences in economic phenomena cannot be explained without taking into consideration the social value hierarchy in each region, which determines the range of variation of economic variables.

The paper evaluates the effect of the change in the forest taxation laws which came into force in January 1977 on the value of the taxable cubic metre in each commune, a measure of the mean timber price. The taxable cubic metre is taken into include timber assortments corresponding to the mean planned cut for the area, which are then assessment at their mean local stumpage prices. Account is also taken of the mean costs involved in forestry, which increase from the south of Finland to the north.

The new principles of taxation, based on data from the V and VI National Forest Inventories, give higher values for the taxable cubic metre, and thus heavier taxation, in the Southern Finland, largely by allowing for a higher proportion of saw logs than previously, and lower values, an easing of taxation, in the north.

The study attempts to establish to what extent the present regional allocation of the forest improvement subsidies equalize the profitability of forest drainage in Finland. The benefit/cost ratio has been used to describe the regional variation of the profitability

The study revealed that the forest improvement subsidies granted in 1968, even the highest possible subsidies, did not equalize the profitability of forest drainage. According to the results, the northern regions are at a disadvantage compared to the southern parts of the country. To fully equalize the profitability of forest drainage the average subsidies granted in 1968 should have been raised in the second financing zone from 22 to 32%, in the third zone from 32 to 60%, and in the fourth, northernmost zone from 43 to 86%. The study also suggests that the boundary lines of the financing zones should run, at least in Central and Northern Finland, from southeast to northwest instead from east to west, as it is now.

The aim of this paper was to study the nature of the relative areal differences in the Finnish forests in respect of timber yield, intensity of exploitation and stumpage prices. The yield index is the most inconsistent and the source of the greatest regional differences. The differences arise even in Southern Finland, as the yield in the South-West is only 80 % of that obtained in Eastern Häme. The areal variations in the wastage index are of the order of only 10 % at most, and the stumpage price index is relatively constant, remaining within the 10 % limit, as far north as the southern boundary of the province of Oulu.

Indices for the forest yield and final forest returns suggest that the further one goes in Finland the greater the discrepancy between the two, as a consequence of the increase in stumpage price differences. Thus, whereas the yield per hectare in North-Eastern Finland is about 20 % of that in Eastern Häme, the stumpage price is similarly only just over 50 % of that prevailing in the latter area. This, the resulting returns per hectare are only 10 % of those obtainable in the more southerly area. When the return per hectare for the Forestry Board District of Eastern Häme is represented by the index 100, one then obtains corresponding return indices of 21.0 for the Northern Ostrobothnia and Kainuu area, 13.0 for Lapland and 10.0 for North-Eastern Finland. Thus, it may be said that roughly 10 hectares of forest land in Lapland, 5 in Northern Ostrobothnia or Kainuu, or 2 in Northern Karelia or the coastal area of southern and central Ostrobothnia would be required to produce the same returns as 1 hectare in Eastern Häme. This represents an extremely wide range of variation within the borders of one country.

This work provides a clear and sufficiently accurate impression of the order of magnitude of the areal differences in returns from the Finnish forests, and may thus serve as an adequate basis for the taking of decisions in this field.